Auto parts supplier Nichirin seeks to build ideal production processes to prepare for expected increase in demand
Written by Peter Henderson & Produced by Sydney Iyer
Nichirin Canada Inc., a Brantford, Ontario-based manufacturer, is hoping to use its Japanese pedigree and manufacturing techniques to overcome the challenges of the current global economic client.
As a major supplier of the automotive indus¬try, Nichirin is exposed to the global downturn in automotive sales, but it is well-placed thanks to its adherence to the development of an ideal production process and its policy of continuous progress in technological development, produc¬tion, and quality control.
Nichirin Canada is one arm of Nichirin Co. Ltd., a Japanese company that manufactures hoses and other engine parts for the automo¬bile industry, as well as hoses and other parts for household use. The company has operations all over the world, including Canada, the United States, China, and the United Kingdom.
Founded in 1914, Nichirin has grown from a rubber-trading business into a global manufacturer. The company began to expand overseas in the 1980s, and opened its Cana¬dian subsidiary in February 1987. The firm received ISO9001 certification in October 1995, and received ISO14001 certification in February 2002. Nichirin employs over 1,500 people, including 170 at Nichirin Canada. The firm has global sales of almost US$350 mil¬lion, and their Canadian subsidiary has sales of north of US$50 million.
Nichirin Canada Inc. manufactures a wide array of automotive hoses, primarily for Honda Canada. The Canadian company makes brake, air-conditioning, and power steering hoses, and, according to their website, offers “cutting-edge hose manufacturing to accelerated automotive development.” Their solid knowledge base and Japanese manufacturing techniques make them a leading supplier, but the troubles in the world economy are affecting businesses of all types.
Nichirin Canada vice-president Junji Takeshima knows the challenges that Nichi¬rin faces. A 24-year veteran of the com¬pany, he sees the upheaval in the automotive industry first-hand. Car sales have fallen around the globe, especially sales of larger vehicles like trucks and sport utility vehicles [SUVs].
“[Almost] every customer’s manufacturing volume has been decreased by 30 percent,” says Takeshima. “Especially in the SUV [market], there has been a large decrease in sales volume.”
Though the company strives to make good employee relations a core part of its mandate, the economic downturn has led to cutbacks.
“We have had layoffs,” explains Takeshima. “We had a second shift for over 15 years, but we have change to just one shift [since] Febru¬ary. Also, we have [had] temporary shutdowns; it depends on customer operations every month.”
The slowdown has affected Nichirin’s pro¬duction process, giving impetus for changes in manufacturing and distribution. Though Take¬shima believes that the recession will be over soon, his company has still made changes to the way it does business.
“We think these conditions will only last for maybe one year,” he says. “We have a sister company [Nichirin Tennessee Inc.] in Tennes¬see, and we have transferred some products there as well as transferred some products to here. We’re trying to create the best productiv¬ity for each plant right now.”
Nichirin Canada recently lost one of its biggest suppliers to bankruptcy, though it was able to cover its needs by increasing its orders with another company. Though the loss of a supplier was a temporary setback, the move ended up being beneficial for the company.
“We have many sister plants, in China, Thai¬land, and Japan also,” says Takeshima. “Many use the same supplier. Now, about 70 percent use the same supplier. Because of the increased volume, it makes for a cheaper price [for us].”
Takeshima looks at the downturn as both a challenge and an opportunity. Though the outlook for the next few months isn’t great, the solid resource base of the company and its international reach allow Nichirin Canada to plan ahead for when the economy picks up.
“We’re taking this as a chance to improve productivity,” Takeshima explains. “We must make a profit, even in this environment, so we have to explore what [resources] we can use [more intelligently].”
View Digital Corporate Profile of Nichirin in Manufacturing Digital June 2009